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It is almost exclusively used on black cards. In proper folklore, demons are usually described as evil spirits. However, in Magic: The Gathering, they are almost universally horned beasts which usually walk upright and are at least to some degree sentient, but also display feral and most certainly malevolent behavior.

Multicolor Demon Creature

Demons are in general very cost effective creatures with powerful and/or evasive abilities on big bodies. However, they are also usually bound to high and intensive mana costs which usually include at least two colored mana. Regardless, there are also somewhat cheap Demons, which usually compensate for their large bodies and cheap cost, with disadvantageous upkeep costs.

The creature type Demon and the word "demon" in itself fell largely out of favor for Wizards of the Coast, after the release of the early sets due to its satanic connotation and also problems with Dungeons & Dragons. For a large portion, the creature type Horror was used for creatures which would have usually been Demons. However, the creature type has since been revived.

Oni

Until the arrival of the Kamigawa block, Demon was a creature type used for large sized rare creatures, and the creature type was only used irregularly. This changed with Champions of Kamigawa because this set, and the other sets in the same block are rooted in Japanese Folklore. It had also made use of the Japanese version of the Demon called Oni.

A few Oni's were portrayed as having a symbiotic relationship with Ogres in Kamigawa with Demons losing disadvantageous effects if the player also controlled an Ogre, and Ogres gaining abilities or losing disadvantageous effects if the player also controlled a Demon.

The Oni's in Particular were (a * beside the name denoting a symbiotic effect with ogres):

It should also be noted that five of the nine demons that are either neither multicolored or not-black are legendary. Meanwhile, the only legendary mono-black Demon that did not come from Kamigawa block (in which all rare creatures are legendary) is Spirit of the Night.